Members of the winged helix/forkhead (~forkhead~) family of transcription factors have critical roles in the regulation of gene expression, embryogenesis and tissue differentiation. The precise regulation of gene expression in airway epithelial cells is critical in the developing, injured and diseased lung, however little is known about transcription factors that direct gene expression in airway epithelial cells. Accordingly, we have cloned hepatocyte nuclear factor-3/forkhead homologue 4 (H.H.-4), a member of the forkhead family of transcription factors with expression in the airway restricted to bronchial epithelial cells. In evaluation of H.H.-4 expression in the developing lung, we found expression was confined to the proximal airway epithelial cells and that the onset of expression uniquely occurred at the earliest stage of differentiation between proximal and distal airway epithelium (the late pseudoglandular stage). In evaluation of H.H.-4 function, we found that H.H.-4 is a potent transcriptional activator and is capable of transactivating the Clara cell secretory protein (CCP) gene, a protein with a temporal and spatial pattern of expression in airway epithelial cells tightly linked to H.H.-4. The focus of this proposal is to determine the function of H.H.-4 in the differentiation and growth of the proximal airway. Specifically, we propose to: (1) Identify the optimal DNA sequence and corresponding target genes for H.H.-4 in proximal airway epithelial cells; (2) Characterize the structural regions of H.H.-4 responsible for DNA site-specific binding, transcriptional activation and nuclear localization in airway epithelial cells; an (3) Determine of the role of H.H.-4 in the development and differentiation of the proximal airway epithelium through targeted disruption of the H.H.-4 gene to create H.H.-4 deficient mice. Determining the role of H.H.-4 in the regulation of proximal airway epithelial cells will facilitate an understanding of molecular mechanisms driving the phenotypic abnormalities of epithelial calls in lung disease.